Supply issues are partly put to bed
Brent crude has dropped on a raft of headlines pushing againts supply problems that might arise from the North Sea Forties pipeline shutdown. Commodity news has been front and centre today and a big driver of commodity FX. Here’s the latest headlines;
- IEA say they are monitoring the closure but currently has no need to act as the market is well supplied
- Scottish minister says there are no plans to shut the Grangemouth refinery, and they are not expecting much impact for fuel and gas supplies
- Italy earlier declared a state of emergency on the Austrian gas explosion but further comments suggest that the slack could be picked up from other sources.
Brent had risen to a high of 65.80 eralier but the headlines above helped send it back down to 64.63, although we’ve already bounced back to 65.25.
In FX, the CAD gained as oil prices rose among general energy price rises. We touched a low of 1.2812 but are now back up to 1.2856. AUD is fairing a bit better and has only lost around 18 pips from its 0.7579 high. GBPUSD, which can be a mover on oil prices too, has dipped from another test towards the 1.3380 highs and is trading at 1.3362.
US PPI was out and that’s provided some USD strength also. EURUSD is the main paiur suffering as it falls to a low just now of 1.1736 from 1.1770 (there’s also some yen strength in play as EURJPY is falling too). USDJPY is breaking new highs at 113.63 and faces some resistance around 113.80. USDCHF is also gaining as it runs up to 0.9934 from a low of 0.9890.
A little livelier than this morning so let’s see where we go from here.
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Shouldn’t be the oppposite? I mean, less offer and high demand for the winter. Prices should go up o I’m missing sth.
The usual seasonal price changes are pretty much baked in these days but when we get extremes and unseen events then we see prices a bit more volatile. Gas prices to the UK have surged on the cold snap we’re having and when you throw in major pipeline problems, that just throws more fuel on the fire (pardon the pun).
The main focus today (outside of the tragedy of people dying) is whether, and how hard, supplies would be hit. That rhetoric has been turned down, and thus the volatility is coming out.
We’re having one of those days where the market jumps on a reason to trade and so we’ve seen fx strongly tied to commods. USDCAD is a prime example.
It’s a very sad tragedy, I’ve seen the problems in Italy. It’s when we see how dependents we are of this energy and sth has to be changed. I didn’t know that UK is so dépendent of gas. Here in Switzerland, it’s quite Nothing. More and more it’s geothermie (sorry in french but heat from the earth or pompe à chaleur (transform the air), but gas quite Nothing. Green tecs are the future and it’s very interesting. I always have in mind the crypto…. sorry…. I’ll do it 😉
Being an island we’re very reliant on fuel imports. We’re stuffed for solar power too given the climate. I’ve always said they should pipe the hot air from our Parliament. We’d power the globe 10 times over each year 😉